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B203a Final Exam review 2013-2014 second
CH-1 Marketing
Q1) Define marketing concept, production orientation, sales orientation, marketing orientation and relationship
marketing
The Marketing Concept: The philosophy that an organization should try to provide products that satisfy
customers’ needs through a coordinated set of activities that also allow the organization to achieve its goals.
The Production Era: The period of mass production following industrialization. The industrial revolution
made it possible to manufacture products more efficiently.
The Sales Era: The period from the mid of 1920- to the early 1950 when competitive forces and the desire
for high sales volume led a company to emphasize selling and the sales person in its business strategy as the
major means for increasing profits.
The Marketing Era: By the early 1950, some business people begin to recognize that efficient production and
extensive promotion of products didn’t guarantee that customers would buy them.
The Relationship Marketing Era: By the 1990, the current period in which the focus is not only on expediting
the single transaction but on developing ongoing relationships with customers.
Q2) Differentiate between transactional marketing and relationship marketing
Transactional marketing focus was on the single transaction or exchange.
Relationship marketing recognized that long term success and market share gains depend on such
transactions, but also on maintaining a customers’ loyalty and on repeatedly gaining sales from existing
customers.
Q3) The marketing mix is an approach which managers can use to help to make its offering more attractive to its
customers. Explain the concept of the marketing mix and discuss the four elements which comprise the marketing
mix.
Marketing Mix Development
Traditionally, the marketing mix was deemed to consist of four major components: product, place (distribution),
promotion and price. Increasingly, a fifth component is viewed as “people” , who provide customer service and
interact with customers and organizations within the supply chain.
A primary goal of the marketing manager is to create and maintain a marketing mix that satisfies customers’
needs for a general product type. Before they can do so, they have to collect in-depth , up-to-date information
about those needs.
1- Product Variable- A product can be a good, a service, or an idea. The product variable is the aspect of the
marketing mix that deals with researching consumers’ product wants and designing a product with the desired
characteristics.
2- Place Variable: To satisfy consumers, products must be available at the right time, and in a convenient
location. A marketing manager seeks to make products available in the quantities desired to as many
customers as possible, and to keep the total inventory, transport, and storage costs as low as possible.
3-Promotion Variable: The aspect of the marketing mix that related to communication activities that are used to
inform one or more groups of people about an organization and its products.
4- Price Variable: The aspect of the marketing mix that relates to activities associated with establishing pricing
policies and determining product prices.
5- The People Variable: The aspect of the marketing mix that reflects the level of customer service, advice,
sales support, and after-sales back-up required involving recruitment policies, training, retention and motivation
of key personnel.
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B203a Final Exam review 2013-2014 second
Ch-3 Marketing
Q1-The marketing environment consist of two forces, the Macro and the Micro environment.
Discuss the difference between the Macro environment and the Micro environment.
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The “macro forces” of the marketing environment affect all organizations operating in a particular
market, from manufacturers to distributors to customers, and such an impact is largely universally felt
by such organizations.
While “micro forces” of the marketing environment are more situation- and organization- specific,
including the organization’s internal environment, suppliers, marketing intermediaries, buyers,
competitors and the organization’s public.
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Discuss the core aspects of the micro marketing environment
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The organization: refers to the internal environment: top management, finance, research &
development, sales and marketing, etc.. the marketing function’s recommendations must be consistent
with senior management’s corporate goals; be conveyed to other functions within the organization; and
reflect colleagues’ views, input, concerns and abilities to implement the desired marketing plan.
Suppliers: most organizations source raw materials, components or supplies from third parties.
Without the understanding and cooperation of these other organizations, a business would fail to
deliver a quality product or service that satisfies its customers’ needs.
Marketing intermediaries: some businesses sell directly to their targeted customers. Most, though,
utilize the skills, network and resources of intermediaries to make their products available to the enduser customer. Intermediaries include resellers such as retailers, wholesalers, agents, brokers and
dealers; providers of marketing services such as advertising agencies or packaging design
consultancies…etc..
Buyers: customers are central to the marketing concept. They have changing requirements, needs
and perceptions, which marketers must understand, anticipate and satisfy. Consumers should be
analyzed, and the marketing mix must be designed to satisfy these customers’ requirements.
Competitors: marketers must strive to satisfy their target customers but in a manner that differentiates
their product, brand and overall proposition from competing companies’ marketing mixes. In order to
achieve this, marketers require an in-depth understanding of their competitors.
Publics: Includes any group-public- that does or could impact an organization’s ability to satisfy its
target customers and achieve its corporate objectives. These include: financial bodies such as banks,
investment houses, shareholders; newspapers magazine, radio, television or Internet media that carry
features about a business; government bodies; consumer and pressure groups; neighborhood publics
such as residents…etc
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Discuss the difference between environmental scanning and environmental analysis.
Environmental Scanning: Is the process of collecting information about the forces in the marketing
environment. Scanning involves : observation, scanning secondary sources, such as the web,
business, trade, government, and general interest publications , and marketing research.
Environmental analysis: Is the process of assessing and interpreting the information gathered
through environmental scanning.
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What is the tool used to analyze the marketing environment.
The tool used to analyze the marketing environment is PEST Analysis.
PEST analysis: A popular name for an evaluation of the marketing environment, looking at politicalincluding legal and regulatory issues- economic, social and technological developments, and
assessing the implications of such issues.
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B203a Final Exam review 2013-2014 second
CH-4 Marketing
Describe a major purchase that you have made, and discuss the different stages of your consumer decisionmaking process.
Consumer Decision Making Process
You should start by identifying a recent purchase that you have made, and identifying the 5 stages of the
consumer decision-making process:
A major part of buying behavior is the decision process used in making purchases . The consumer buying
decision process includes five stages.
1. Problem Recognition
2. Information Search
3. Evaluation of Alternatives
4. Purchase
5. Post- Purchase Evaluation
Stage 1: Problem recognition: occurs when a buyer becomes aware that there is a difference between a
desired state and an actual condition. (+Explanation in relation to the example)
Stage 2: Information search: after recognizing the problem or need, the buyer searches for information about
products that will resolve the problem or satisfy the need.
There are two aspects to information search:
Internal search: involves remembering previous experiences.
External search: involves communicating with friends and colleagues, comparing available brands and prices,
or reviewing television or press advertisements, and public sources including the Internet. (+Explanation in
relation to the example)
Stage 3: Evaluation of alternatives: when evaluating the products in the evoked set, a buyer establishes
criteria for comparing the products. These criteria are the characteristics or features that the buyer wants or
does not want. The buyer also assigns a salience (or level of importance), to each criterion; some features
carry more weight than others. This is used by the buyer to rank the brands evoked set. If the evaluation stage
does not yield a brand that the buyer wishes to buy, further information search may be necessary.
(+Explanation in relation to the example).
Stage 4: Purchase: when the consumer chooses which product or brand to buy. This stage is the outcome
the outcome of the consumer’s evaluation of alternatives. During this stage, the buyer also picks the seller
from whom the product will be purchased and finalizes the terms of the sale. (+ Explanation in relation to the
example)
Stage 5: Post-purchase evaluation: After the purchase has taken place, the buyer begins evaluating the
product to check whether its actual performance meets expected levels. Many of the criteria used in evaluating
alternatives are revisited during this stage. The outcome will determine whether the consumer is satisfied or
dissatisfied, and will influence future behavior. The level of satisfaction a consumer experiences will determine
whether they make complaint, communicate with other possible buyers, or purchase the product again.
(+Explanation in relation to the example)
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B203a Final Exam review 2013-2014 second
CH-6 Marketing
Q1) Marketing segmentation is a key approach to marketing; please explain what do we mean by segmentation, by
discussing the four most common types of criteria used for segmentation, use examples to support your
discussion.
Discuss in details the main bases for segmentation.
Bases for Segmentation
Market Segmentation: is concerned with grouping consumers according to their needs. The aim of
segmentation is to identify a group of people who have a need or needs that can be met by a single product, in
order to concentrate the marketing firm’s efforts most effectively and economically.
The choice of segmentation variables is based on several factors:
The variables chosen should relate to customers need, uses of, or behavior toward the product.
The selected base should be usable. For example, laptop computer manufacturers might segment the market
on the basis of income and age but not on the basis of religion.
The segmentation variables must be measurable. For example, segmenting the market on the basis of
intelligence or moral standards would be quite difficult to measure.
Criteria used for segmentation
Demographic variables: demographic characteristics that marketers commonly use in segmenting markets
include: age, gender, race, ethnicity, income, education, occupation, family size…etc... Example.
“Manufacturers of tea pages offer their products in packages of different sizes to satisfy the needs of single
consumers and large families”.
Geographic variables: the needs of consumers in different geographic locations may be affected by their
local climate, terrain, natural resources and population density.
Markets may be divided into regions because one or more geographic variables may cause customers’ needs
to differ from one region to another. For example, a company that sells products throughout the EU, need to
take the different languages spoken into account when labeling its goods.
Psychographic variables: marketers sometimes use psychographic variables such as personality
characteristics, motives and lifestyles to segment markets. for example, the home insurance market might
segment into those who are afraid of crime, natural disaster or accidental damage to property.
Behaviouristic variables: markets could also be segmented on the basis of an aspect of consumers’
behavior towards the product. Example, airline such as British Airway offers frequent flier programmes to
reward their regular customers with free trips and discounts for hotel accommodation and car hire.
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B203a Final Exam review 2013-2014 second
CH-8 Marketing
Q1) a good is a tangible physical entity. A service, by contrast, is intangible.
A-List and discuss the three levels of products.
B-Enumerate the basic characteristics of services, and explain four of them. Support your
answer with examples
A. The 3 levels of products are:
The Core product: The level of a product that provides the perceived or real core benefit or service.
The actual product: It is a composite of several factors: the features and capabilities offered, quality and
durability, design and product styling, packaging and, often of great importance, the brand name.
The Augmented product: “Support” aspects of a product, including customer service, warranty, delivery and
credit, personnel, installation and after sales support.
B. The basic characteristics of services are:
Intangibility: An inherent quality of services that are performed and therefore cannot be tasted, touched,
seen, smelled or possessed. + example
Inseparability: In relation to production and consumption, a characteristic of services that means they are
produced at the same time as they are consumed. + example
Perishability: A characteristic of services whereby unused capacity on one occasion cannot be stockpiled or
inventoried for future occasions. + example
Heterogeneity: Variability in the quality of service because services are provided by people, and people
perform inconsistently. + example
Client-based Relationships: interactions with customers that result in satisfied customers who use a service
repeatedly over time. In fact, some service providers, such as accountants and financial advisers, call their
customers 'clients' and often develop and maintain close, long-term relationships with them. + example.
Customer Contact: Not all services require a high degree of customer contact, but many do. Customer
contact refers to the level of interaction between the service provider and the customer that is necessary to
deliver the service. High-contact services include healthcare, real estate, and hair and beauty services.
Examples of low-contact services are car repairs and dry cleaning. + example
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Abu-Meshaal
B203a Final Exam review 2013-2014 second
CH-11 Marketing
Q1): Communicating with customers
Because marketing channel appropriate for one product may be less suitable for others, many
different channels of distribution have been developed.
a) Define distribution channel and discuss the different channels using an example.
b) What is the longest channel, and what is the importance of the longest channel.
c) Do you think that eliminating distribution channel or cutting down the number of intermediaries in
the distribution channel will reduce the price for the final consumer?
Distribution Channel: Is a group of individuals and organizations that direct the flow of products from
producers to consumers.
Types of channels:Channel A: Describes the direct movement of goods from producers to consumers.
Example: - Customers who pick their own fruit from commercial orchard or buy cosmetics from door-to-door
sales people are acquiring products through a direct channel.
A producer who sells goods directly from the factory to end users and consumers is using a direct marketing
channel. For example, direct line’s teleselling of car insurance.
Channel B: Moves goods from producers to retailers and then to consumers, is often used by large retailers
that can buy in quantity from a manufacturer.
Example: - Retailers such as Marks & Spencer, Sainsbury’s, and Carfour sell clothing food and many other
items they have purchased directly from the producers. Cars are also commonly sold through this type of
marketing channel.
Channel C: A long standing distribution channel, specially for consumer products, channel C takes goods from
producer to wholesalers, then to retailers and finally to consumers.
This option is very practical for a producer who sells to hundreds of thousands of consumer through thousands
of retailers. A single producer finds it hard to do business directly with thousands of retailers.
Example, consider the number of retailers that stock Coca-Cola, it would be impossible for Coca-Cola to deal
directly with all the retailers that sells its brand of soft drinks , manufacturer of tobacco products is another
example.
Channel D: Through which goods pass from producer to agents to wholesalers, and only then to consumersis frequently used for products intended for mass distribution, such as processed food.
For example: to place its biscuit line in specific retail outlets, a food processor may hire an agent to sell the
biscuits to wholesalers. The wholesalers then sell the biscuits to supermarkets, and other retail outlets.
b) What is the longest channel, and what is the importance of the longest channel.
The longest channel of distribution is Channel D, through which goods pass from producer to agents to
wholesalers to retailers and then to consumers.
c) Do you think that eliminating distribution channel or cutting down the number of intermediaries in
the distribution channel will reduce the price for the final consumer?
No, because eliminating wholesalers would not remove the need for services that wholesaler provides.
Although wholesalers can be eliminated, the functions they perform cannot be eliminated. Other channel
members would have to perform those functions and customers would still have to fund them.
Wholesalers are often more efficient and less expensive.
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B203a Final Exam review 2013-2014 second
Q2) Marketing channels serve many functions. These functions include creating utility, facilitating
exchange efficiencies, and alleviating discrepancies. Discuss.
1- Creating Utility: Marketing channels creates four type of utility: Time, place, possession and form.
1) 1-Time utility is having products available when the customer wants them.
2) 2-Place utility is created by making products available in locations where customers wish to purchase
them. Use possession Utility is created by giving customer access to the product to use or to store for
future use.
3) 3-Possession utility can occur through ownership or through arrangements such as lease or rental
agreements
4) 4-Form utility is created by channel members by assembling, preparing or otherwise refining the
product to suit individual customer needs.
2- Facilitating exchange efficiencies: Marketing intermediaries can reduce the cost of exchanges by
performing certain services or functions efficiently.
Intermediaries are specialists in facilitating exchanges. They provide valuable assistance because of their
access to, and control over important resources used in the proper functioning of marketing channels.
3-Alleviating Discrepancies: The functions performed by channel members help to overcome two major
problems: discrepancies in quantity and discrepancies in assortment.
o A discrepancy in assortment exists because consumers want a broad assortment, but an individual
manufacture produces a narrow assortment. Ex. Most consumers want a broad assortment of products,
beside Jeans, they want to buy shoes, food, cars, hi-fi systems and many other products.
o A discrepancy in quantity exists because the company produces more amount of products than average
customer wants. Ex. The producer produces 100,000 pairs of jeans, however, customers want a few pairs
of jeans.
Sorting Out: Is separating heterogeneous products into relatively uniform, homogeneous groups based on
product characteristics such as size, shape, weight, color.
For example, sorting a tomato crop into those suitable for retail sales and those suitable only for juice
production.
Accumulation: Is the development of a bank or inventory of homogeneous products with similar production or
demand requirements. It means aggregating small production batches into amounts big enough to be worth
shipping for.
For example: Arranging for small exporters to share container.
Allocation: Breaking down large shipments into smaller amounts. A wholesaler receiving a truckload of baked
beans will sell them on a case at a time.
Assorting: Combining collection of products that will appeal to groups of buyers, for example, food wholesaler
will specialize in all the products needed by caterers and grocers, including shop signs, knives and forks.
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B203a Final Exam review 2013-2014 second
CH-12 Marketing
Q1) Compare and contrast price and non-price competition. Describe the conditions under which each
form works best. Support your answer with examples.
Discuss the four pricing approaches used by organizations to set product price
Price & Non-Price Competition
Under price competition, marketers highlight the price of their product as the basis for selecting their offering
in preference to those of competitors. In non-price competition, the features and other benefits of the product
are emphasized more than the price.
Price-based competition works best for products and services which enjoy cost advantages over
competitors and where customers are price-sensitive.
Non-price-based competition is more appropriate where customers are less price-sensitive, where offerings
are high quality, and where products have advantages which are difficult to copy. Customers must also desire
these advantages and be able to distinguish the product on offer from those competitors.
For example, consumers often shop around for the best electricity and gas prices in a market which is
characterized by price competition. For consumers buying luxury household goods, price is likely to play a less
important role in the decision.
The Selection of a Basis for Pricing
The four pricing approaches are:
Cost based pricing: a pricing approach whereby a monetary amount or percentage is added to the cost of a
product.
Demand based pricing: a pricing approach based on the level of demand for a product, resulting in a high price
when demand is strong and low price when demand is weak.
Competition based pricing: a pricing approach in which an organization considers costs and revenue to be
secondary to competitors’ prices.
Marketing oriented pricing: a pricing approach in which a company takes into account a wide range of factors
including marketing strategy, competition, value to the customer, price-quality relationships, explicability, costs,
product line pricing, negotiating margins, political factors and effect on distributors/retailers.
When going through the stages of establishing prices, marketers must be able to grasp target customer’s
evaluation of price and perceived value for money, as well as understand market trends and competitor’s
pricing moves.
Discuss the stages of establishing prices.
The 1st stage: Selecting Pricing objective
Is very critical because it is the foundation on which the decision of subsequent stages is based, Organizations
may use numerous short and long term pricing objectives.
The 2nd stage: Assessment of the target market’s evaluation of price and its ability to pay
This shows how much emphasis to place on price and may help determine how far above the competition
prices can be set.
The 3rd stage: Determination of demand
An organization must determine the demand for its products. The classic demand curve shows that as price
falls, the quantity demanded usually increases, however, for prestige products, demanded increases as price
increases. Next, price elasticity of demand must be determined, if a demand is elastic, a change in price
causes an opposite change in total revenue, inelastic demand results in a change in the same direction in total
revenue when a product price is changed.
The 4th stage: Analysis of demand,
cost and profit relationships
This can be accomplished through marginal analysis or break even analysis.
The 5th stage: Evaluation for competitor’s prices
A marketer needs to be aware of the prices charged for competing brands. This allows a company to keep its
prices the same as competitor’s prices when non- price competition is used. If a company uses prices as a
competitive tool, it can price its brand or product below competing brands or products.
The 6th stage: Selection of a basis of pricing
The three major dimensions on which prices can be based are cost, demand, and competition.
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Abu-Meshaal
B203a Final Exam review 2013-2014 second
CH-1 Information
The process of information management can be broken down into a set of key phases:
1- Gathering Information
2- Analyzing Information
3- Communicating Information
4- Storing Information
1- Gathering Information:
Includes all the activities you engage in to collect information you need.
In some cases, it may involve no more than receiving information that other people give you, in others, you
may have to actively seek out the information.
Information gathering may be routine. Ex. staff completing and submitting weekly time-sheets or expense
claims) or it may be ad hoc. Ex. a customer calls to say they haven't received their order). They can be smallscale or large- scale. (5 marks)
2- Analyzing information
The purpose of analyzing information is to make it more useful for decision making; this can be considered as
a process of transforming raw data into meaningful information.
Analyzing information may involve a variety of manipulations of the raw data; these manipulations can range
from simple operations done in a person’s head to complex calculations through the use of sophisticated
computer software. (5 marks)
3-Communicating Information
Communicating information involves the process of formulation, transmission, receiving, and interpretation
Formulation: Involves three main steps: Deciding what to say, to whom, and how to say it.
Transmission: Involves the choice of means of communication (leaflet, fax, team meeting, etc.).
Reception:
Is affected by choices about information and transmission. The more the intended recipient is
overloaded with incoming information, the greater the risk that the recipient may not attend to your message.
The risk is also greater the more tired or stressed the recipient is.
Interpretation: Involves the issue of whether the recipient understands the message in the way you intended.
4: Storing Information: Information needs to be stored, both for use in later activities and for submission to
higher management and auditing bodies.
For some type of information, there are statutory requirements determining what must be kept and for how
long. ((5 marks)
Information Gathering is the most critical of the information management process (2 marks) if things go wrong
at this phase, all the other processes are working with information of inferior quality.
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Abu-Meshaal
B203a Final Exam review 2013-2014 second
Q2) The analytic tool devised by Professor Don Marchand shows different ways in which information
can create value for organizations. Discuss these ways and support your answers with examples.
The different ways in which information can create value according to Don Marchand are the following:
Add value: value is added through providing better-quality products and services to an organization's
customers. Information can be used to better understand customer characteristics and needs and their level of
satisfaction with services. Information is also used to sense and respond to markets. Information about trends
in demands, competitor products and activities must be monitored so that organizations can develop strategies
to compete in the marketplace. + Example.
Reduce costs: cost reduction through information is achieved through making the business processes more
efficient. Efficiency is achieved through using information to create market and deliver services using fewer
resources needed to operate the processes through automation and improve internal and external
communications. + Example.
Manage risks: risk management is a well-established use of information through organizations. Risk
management within organizations has created different functions and professions such as finance, accounting,
auditing and corporate performance management. + Example.
Create new reality: this refers to how information an new technologies can be used to innovate, to create new
ways in which products or services can be developed + example.
Q) Several types of promotional methods can be used to communicate with individuals, groups and
organizations. Define the term ‘promotional mix’ and then discuss any five of the promotional mix
ingredients. Support your answer with examples.
Promotional mix is the specific combination of ingredients an organization uses to promote a product,
traditionally including four ingredients: advertising, personal selling, PR and sales promotion. Sponsorship,
direct mail, the Internet and direct marketing are recent additions to the promotional mix
Advertising: is a paid form of non-personal communication about an organization and its products that is
transmitted to a target audience through a mass medium. + example
Personal selling: the use of personal communication is an exchange situation to inform customers and
persuade them to purchase products. + example
PR: non-personal communication in news-story about an organization and/or its products that is transmitted
through a mass medium at no charge. + example
Sales promotion: an activity or material that acts as a direct inducement by offering added value to or
incentive for the product to resellers, sales people or consumers. + example.
Sponsorship: the financial or material support of an event, activity, person, organization or product by an
unrelated organization or donor. + example
Direct mail: a method of communication used to entice prospective customers or charitable donors to invest in
products, services or worthy causes. + example
The Internet: the Internet provides a tool that can be interactive, updated or modified quickly, and that can
produce material aimed at very tightly defined target groups or even individual consumers. + example.
Direct marketing: A decision by a company’s marketers to select a marketing channel which avoids
dependence on marketing channel intermediaries and to focus marketing communications activity on
promotional mix ingredients which deal directly with targeted customers. + example
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B203a Final Exam review 2013-2014 second
CH-4 Information
1) Using an example known to you, explain the relationship between data, capta, information and
knowledge.
Data, Capta, Information and Knowledge
Data: is a qualitative or quantitative attributes of a variable or set of variables. (A newspaper contains lots of
data).
Capta: is the result of selecting some data for attention. (Selecting the stocks that you are interested in—
Company X car manufacturer— and calculating their share price, but this is still not enough until you can place
it in a context that makes sense).
Information: transforming capta into information is a human act that machines cannot produce. It’s about
attributing meaning to the processed data, or understanding the data. (Learning that your share performance is
declining over time with respect to other stocks).
Knowledge is created when this information is set in a wider context (another report for fuel rising prices could
give you the knowledge that buying share in a car manufacturer was a mistake.)
CH-5 Information
Problems in Information Gathering
Information Gathering is the most critical of the information management process, if things go wrong here, all
the other processes are working with information of inferior quality, common problems are:
The required information is not gathered at all.
Gathering is done poorly so that there are gaps and errors.
Information is gathered but nothing is done with it.
Too much information is gathered, what is needed is hidden by all the irrelevant information.
A lot of time is spent gathering information for the use of others but nothing of value for you is achieved.
Solving problems in information gathering can be done through the following steps:
Accountability: Responsibility for who collects what should be made clear.
Data Definition: Agreement on what items a particular type of information should include.
Standardization: Ensuring everyone is collecting the same information in the same way.
Quality Monitoring: Ensuring that information of the right quality is being collected.
Skill: Helping staff improve their information- gathering skills
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B203a Final Exam review 2013-2014 second
Q) Discuss the difference between competitive advantage, differential advantage. Discuss in details
the three routes to competitive advantage.
Define organizational mission and discuss the benefits organizations can have from a mission
statement.
Define marketing strategy and discuss the difference between strategic market planning and market
plan.
Q) Marketers deal with the marketing mix, which was described by McCarthy as the four Ps of
marketing. Describe a purchase that you have recently made and describe the 4 Ps that were involved
in that purchase.
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